FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 2000
Commission File Number 333-34646
ESAFETYWORLD, INC.
(Exact name of registrant as specified in its charter)
Nevada 11-3496415
(State or other jurisdiction
of Incorporation or organization)
(I.R.S. Employer Identification No.)
80 Orville Dr. Bohemia, New York 11716
(Address of principle executive offices)
Registrants telephone
number including area code 631-244-1454
_________________________________
Former address, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1
934 during the preceding 12 months, (Or such shorter period that the
registrant was required to file such reports)
X Yes No
and (2) has been subject to such filing requirements for the past 90 days
X Yes No
3,000,000
( Number of shares of common stock
the registrant had outstanding as of
September 30, 2000)
PART 1
ITEM 1 - FINANCIAL STATEMENTS
The condensed financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although the Company
believes that the disclosures are adequate to make the information presented n
not misleading.
In the opinion of the Company, all adjustments, consisting of only normal
recurring adjustments, necessary to present fairly the financial position of
the Company as of September 30, 2000 and the results of its operations and
changes in its financial position from June 30, 2000 through September 30,
2000 have been made. The results of its operations for such interim period is
not necessarily indicative of the results to be expected for the entire year.
ESAFETYWORLD, INC.
INDEX
PAGE
PART I.
FINANCIAL INFORMATION
Item 1.
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Unaudited Financial Statements:
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Condensed Balance Sheets
as of September 30, 2000 and June 30, 20003-4
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Condensed Statements of Operations for
the Three Months 5
Ended September 30, 2000 and 1999
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Statements of Cash Flows for the Three
Months Ended 6
September 30, 2000 and 1999
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Condensed Statement of Stockholders'
Equity for the Three 7
Months Ended September 30, 2000
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Notes to Condensed Financial Statements 8-13
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Item 2.
Management's Discussion and Analysis of
14-17
Financial Condition and Results of Operations
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PART II.
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OTHER INFORMATION 18-19
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EXHIBITS
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Financial Data Schedule 20
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ESAFETYWORLD, INC.
CONDENSED BALANCE SHEETS
ASSETS
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September 30, 2000June 30, 2000
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(unaudited)
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Current Assets:
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Cash and cash equivalents $2,866,599 $3,017,852
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Certificate of deposit (maturity 2,000,000 2,000,000
date of March 2, 2001)
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Accounts receivable, less allowance 260,723 97,109
of $3,000
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Other current receivables 26,520 16,907
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Prepaid expenses and other 285,558 246,156
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Total Current Assets 5,439,400 5,378,024
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Property and Equipment, less
accumulated depreciation
of $5,236 and $171
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138,628 101,117
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Acquired Intangibles, less
accumulated amortization of
$110,278 and $82,662
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994,363 1,021,979
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Other Assets 12,000 8,000
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Total Assets $6,584,391 $6,509,120
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See Notes to Condensed Financial Statements.
ESAFETYWORLD, INC.
CONDENSED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
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September 30, 2000June 30, 2000
(unaudited)
Current Liabilities:
Accounts payable $93,995 $45,801
Stockholders' Equity:
Common stock, $.001 par value,
20,000,000 shares 3,000 3,000
authorized; 3,000,000 shares issued
Additional paid-in capital 6,428,644 6,428,644
Retained earnings 58,752 31,675
Stockholders' Equity 6,490,396 6,463,319
Total Liabilities and Stockholders' Equity$6,584,391 $6,509,120
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See Notes Condensed Financial Statements.
ESAFETYWORLD, INC.
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)
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2000 1999
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Sales $249,420 $ 177,985
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Cost of Sales 179,247 106,555
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Gross Profit 70,173 71,430
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Expenses and Other:
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Selling and administrative expenses66,893 16,975
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Amortization of intangibles 27,616 20,800
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Other-net (principally interest) (64,593) 1,747
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Total Expenses and Other 29,916 39,522
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Pretax Income 40,257 31,908
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Income Taxes 13,180 9,573
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Net Income $27,077 $ 22,335
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Basic Income per Share $ .01 $ .01
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Weighted average number of
common and 3,000,000 2,000,000
Common equivalent shares outstanding
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See Notes to Condensed Financial Statements.
ESAFETYWORLD, INC.
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)
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2000 1999
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Cash flows from operating activities:
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Net income $27,077 $22,335
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Adjustments to reconcile net earnings
to net cash provided
by operating activities:
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Depreciation and amortization 32,680
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Decrease in operating assets (168,435) (16,335)
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Net cash provided by operations (108,678) 6,000
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Cash flows from investing activities:
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Purchase of software, equipment and intangibles(42,575)
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Cash flows from financing activities:
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Borrowings 273,000
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Deferred offering costs (167,000)
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Net cash provided by financing activities 106,000
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Net increase (decrease) in cash (151,253) 112,000
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Cash and cash equivalents 3,017,852
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Cash and cash equivalents - ending $112,000
$2,866,599
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See Notes to Condensed Financial Statements.
ESAFETYWORLD, INC.
CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000
(UNAUDITED)
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Common Common AdditionalPaid-inRetained
Stock Stock Capital Earnings Total
Shares Amount
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Balance, July 1, 20003,000,000 $3,000 $6,428,644$31,675 $6,463,319
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Net income 27,077 27,077
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Balance, September 3,000,000 $3,000 $6,428,644$58,752 $6,490,396
30, 2000
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See Notes to Condensed Financial Statements.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--BASIS OF PRESENTATION
ESAFETYWORLD, Inc. (the "Company") was established as a Nevada
corporation in July 1997 as The SL Group, Inc. and changed its name to
eSAFETYWORLD, Inc. in August 1999. It completed an initial public offering of
its common stock in February 2000.
The Company is engaged in the sale and distribution of industrial safety,
cleanroom, laboratory supply and first aid products on the world wide web and
through conventional use of catalogs and toll free telephone numbers. In
September 2000, it announced that it had commenced providing consulting
services to other companies and will establish a subsidiary to sell personal
care, personal first aid, and nutrition products to independent distributors
commencing in early 2001.
The accompanying interim condensed financial statements for the three month
periods ended September 30, 2000 and 1999 are unaudited and include all
adjustments considered necessary by Management for a fair presentation. The
results of operations realized during an interim period are not necessarily
indicative of results to be expected for a full year. These condensed financial
statements should be read in conjunction with the information filed as part of
the Company's Registration Statement on Form SB-2.
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the Company's significant accounting and financial reporting
policies follows:
Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting periods, The principal
assumptions inherent in the accompanying financial statements relate to
the realizability and life of the acquired intangibles included in the
financial statements.
Revenue Recognition -- Revenue for product sales is recognized in the
period in which the product is shipped.
Revenue for consulting services is recognized on projects for which agreements
exist and service has been performed. Costs associated with consulting
projects-in-progress are deferred to the extent that such costs exceed
billings or are incurred prior to billing. Anticipated losses on consulting
projects will be recorded in the period in which the loss becomes known.
Advertising -- The Company charges advertising costs to expense as
incurred. Costs related to CD- ROMs, promotional literature and catalogs are
charged to operations when mailed or distributed.
Basic Income Per Share -- Basic income per common and common equivalent
share are calculated by dividing net income by the weighted average number
of common and common equivalent sharesoutstanding during each period. There
were no options or convertible instruments outstanding during either period,
except for warrants the assumed exercise of which would have been antidilutive.
Fixed Assets Fixed assets consist of the following at September 30, 2000:
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Website development costs $126,986
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Software 6,066
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Equipment 10,812
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Total 143,864
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Less 5,236
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Net $138,628
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Fixed assets are stated at cost less accumulated depreciation. Depreciation is
computed using the straight-line method based upon the estimated useful life
of five years.
Expenditures for repairs and maintenance are charged to expense as incurred.
Upon retirement, sale or other disposition of property and equipment, the cost
and accumulated depreciation are eliminated from the accounts and gain or loss
is included in operations.
Long-lived Assets -- Long lived assets, including intangibles, to be held
and used are reviewed for impairment whenever events or changes in circumstances
indicate that the related carrying amount may not be recoverable. If
required, impairment losses on assets to be held and used are recognized
based on the excess of the asset's carrying value over its fair value.
Long-lived assets to be sold are reported at the lower of carrying amount or
fair value reduced by estimated disposal costs.
Intangibles -line basis over ten years.
Statement of Cash Flows -- For the purposes of this statement, investments
and time deposits having an initial term of 90 days or less are considered to
be cash equivalents.
The Company has a $2,000,000 certificate of deposit that bears interest at
the rate of 5.7 percent per annum and matures on March 2, 2001; accordingly,
such amount is not considered to be a cash equivalent.
The Company maintains substantially all of its cash and certificates of
deposit with one bank. The aggregate cash balances maintained at that bank
exceed the balance insured by the Federal Deposit Insurance Corporation. All
cash and short-term investments are considered as available for sale. The cost
of such investments at September 30, 2000 approximates their market value.
All cash and short-term investments are considered as available for sale.
The cost of such investments at September 30, 2000 approximates their market
value.
Income Taxes -- The Company complies with Statement of Financial Accounting
Standards No. 109 ("SFAS 109"), "Accounting for Income Taxes." Under SFAS
109, the liability method is used in accounting for income taxes. Under this
method, deferred tax assets and liabilities are determined based on the
differences between financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse.
At September 30, 2000, the Company has recorded a deferred tax benefit of
$5,000 relating to the difference in the amortization period used to amortize
the acquired intangibles for financial reporting purposes (ten years) and for
income tax purposes (14 years).
Fiscal Year
NOTE 3
The Company completed an initial public offering on February 23, 2000 in
which it sold 1,000,000 shares of its common stock for gross proceeds
of $7,000,000 (and a net proceeds after all expenses of $5,721,644). As part
of the Offering, it paid the Underwriter a fee equivalent to 13% of total
proceeds as commission and an expense allowance and also paid
$92,000 as a consulting fee. The Company also sold a warrant covering
an aggregate of up to 100,000 shares of common stock exercisable at a
price of $10.50 per share to the underwriter, for its own accounts,. The
underwriter paid a price of $100 for the warrant. The underwriter is entitled
to receive 100,000 shares if it exercises the warrant, commencing on the
first anniversary of the date of this offering until the fifth anniversary
of the date of this offering. The terms of the warrant require the
Company to register the common stock for which the warrant is exercisable
within one year from the date of the prospectus. This underwriter's warrant
is not transferable by the warrant holders other than to officers and
partners of the underwriter. The exercise price of the underwriter's
warrant and the number of shares of common stock for which the warrant is
exercisable are subject to adjustment to protect the warrant holders against
dilution in specific events.
NOTE 4 On August 11, 1999, the Company entered into an agreement under which
it acquired certain intangible assets and rights of the distribution
business of Laminaire Corporation in exchange for 100,000 shares of its
common stock, notes in the principal amount of $500,000 and the assumption of
accounts payables relating to certain professional services in an amount up to
$125,000. The terms of the acquisition were modified and reduced in March 2000
such that the principal amount of notes was reduced to $400,000, and the
Company did not assume any of Laminaire's accounts payable. The
acquisition agreement provided that the Company obtained the customer and
vendor base and lists, a toll free number and certain pricing information
but acquired no tangible assets, including inventory or accounts
receivable, as part of the transaction. The Distribution Division of
Laminaire sold disposable products used in cleanrooms to a variety of
commercial customers.
The Company had the right to offset the principal amount of a $102,000
demand note that it made to Laminaire, in whole or in part, against any
payment due by it to Laminaire under these note agreements. In
September 1999, the Company also guaranteed the payment of Laminaire's
trade obligations to three of Laminaire's vendors. In addition, the Company
had the right to offset the amounts paid under these guarantees or any other
amounts that it paid or pays to satisfy amounts due by Laminaire to its
vendors against any amount due by the Company to Laminaire under the note
agreements.
The notes payable bore interest at eight percent per annum and were payable in
12 quarterly instalments. The first instalments under the note agreements
were payable at the earlier of our completion of the Company's public
offering or March 31, 2000. As of March 31, 2000, the Company had made
sufficient payments to Laminaire and its vendors to satisfy fully the notes
payable issued to Laminaire.
The total purchase price of $1,100,000 (which valued the 100,000 shares of
the Company's common stock that were issued at the public offering price) was
ascribed to "Acquired Intangibles" on the accompanying Balance Sheet.
The Company's President is also a Director of Laminaire Corporation. He did
not participate in Laminaire's deliberations on the transaction described
above. All of the Company's Directors voted affirmatively for the
resolution authorizing the acquisition.
NOTE 5 Consulting Agreements
The Company has consulting agreements with four entities controlled by
officers or directors under which the Company will pay annual consulting
fees of $397,000, $427,000, and $457,000 in each of the three years in the
period ended March 31, 2003. None of these officers or directors receives
any other cash compensation from the Company for their services but receive
reimbursement for expenses including healthcare. Each of these officers has
devoted more than 40 hours per week to the Company during the three months
ended September 30, 2000.
Employment Agreement
The Company's has a three-year employment agreement with a vice president that
calls for an annual salary of $80,000, $100,000 and $120,000 in each of the
three years in the period ended June 30, 2003, as well as reimbursement
of business expenses. The vice president is the daughter of the Company's
president.
Agreements with Apex Interactive and Continental Capital & Equity Corporation
In March 2000, the Company entered into a three-year renewable agreement
with Apex Interactive ("Apex") under which Apex agreed to host the Company's
e-commerce website, provide Internet marketing services and support
the Company's databases used by its website for $10,000 per month,
subject to adjustment.
In July 2000, the Company entered into a one-year agreement with
Continental Capital & Equity Corporation ("CCEC") under which CCEC agreed
to perform public relations and investor relations services for a fee of
$50,000 (included in "Prepaid Expenses" in the accompanying Balance Sheet)
and warrants to purchase 200,000 shares of common stock as follows - 50,000
shares each at prices ranging from $3 to $5 per share.
In October 2000, the Company terminated substantially all of the terms of the
agreement with CCEC and cancelled the warrants. In November 2000, the Company
and Apex agreed to terminate most of the terms of the agreement described
above. The Company will move its website and sign a license agreement to use
proprietary products developed by Apex.
Rent
The Company is obligated under the terms of two short-term operating leases
for office space which call for minimum monthly rentals of approximately
$1,700. Litigation
The Company is a defendant in an action brought by a creditor of Laminaire
asserting, among other things, that eSAFETYWORLD is a successor to Laminaire
and seeking repayment of $200,000 allegedly due to him by Laminaire. Based on
discussion with counsel, the Company believes that this case is substantially
without merit and will not result in a material adverse impact on our financial
condition.
.
Guarantee
The Company guarantees a loan in the principal amount of $400,000 for an
unrelated business associate. The loan is scheduled to be repaid prior to
June 30, 2001.
NOTE 6 - STOCKHOLDERS' EQUITY
The Company was incorporated in the state of Nevada and is authorized to
issue up to 20,000,000 shares of common stock having a par value of $.001 per
share and 1,000,000 shares of preferred stock. Neither the certificate of
incorporation nor the by-laws contain any provision that would delay, defer or
prevent a change in control.
There are 3,000,000 shares of common stock issued and outstanding. Each
share of common stock entitles the holder to one vote on each matter submitted
to the stockholders. The holders of common stock:
have equal ratable rights to dividends from funds legally available for
payment of dividends when, as and if declared by the board of directors;
are entitled to share ratably in all of the assets available for
distribution to holders of common stock upon liquidation, dissolution or
winding up of our affairs;
do not have preemptive, subscription or conversion rights, or redemption
or access to any sinking fund; and
are entitled to one non-cumulative vote per share on all matters submitted
to stockholders for a vote at any meeting of stockholders.
The Company's certificate of incorporation authorizes the issuance of
1,000,000 shares of preferred stock with designations, rights and preferences
determined from time to time by its board of directors. Its board of directors
is empowered, without stockholder approval, to issue shares of preferred
stock with voting, liquidation, conversion, or other rights that could
adversely affect the rights of the holders of the common stock. It has no
present intention to issue any shares of preferred stock. There can be no
assurance that it will not do so in the future. No preferred stock may be issued
without the underwriter's consent for 12 months following the effective date
of the Company's public offering.
The Company has not paid any dividends on its common stock to date.
Stock Option Plan
The Company has a stock option plan that expires in 2009 and enables it to
grant incentive stock options, non-qualified options and stock
appreciation rights for up to an aggregate of 450,000 shares of our common
stock. Incentive stock options granted under the plan must conform to
applicable federal income tax regulations and have an exercise price not
less than the fair market value of shares at the date of grant or 110% of fair
market value for ten percent or more stockholders. Other options and stock
appreciation rights may be granted on terms determined by the compensation
committee of the board of directors.
No options or other awards were outstanding at June 30, 2000. However,
450,000 options were granted in October 2000 with an exercise price equal to
the market price per share at the date of grant.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
Information set forth herein contains "forward-looking statements" which
can be identified by the use of forward-looking terminology such as "believes,"
"expects," "may," "should" or "anticipates" or the negative thereof or other
variations thereon or comparable terminology, or by discussions of strategy.
No assurance can be given that the future results covered by the forward-
looking statements will be achieved. The Company cautions readers that
important factors may affect the Company's actual results and could cause such
results to differ materially from forward-looking statements made by or on
behalf of the Company. Such factors include, but are not limited to,
changing market conditions, the impact of competitive products, pricing,
acceptance of the Company's products in development and other risks detailed
herein and in other filings that the Company makes with the Securities and
Exchange Commission.
Operations
The Company had no revenue generating history prior to July 1, 1999. In
August 1999, it acquired intangible assets consisting of customer and vendor
lists from the Distribution Product Group of Laminaire Corporation. The
Company's business strategy for the twelve months following the
completion of its public offering is designed to have us identified as a
leading distributor of industrial safety, disposable cleanroom, ancillary
cleanroom equipment, laboratory supplies and first aid products for its market
niches. This strategy is to:
update its e-commerce website to incorporate the more than 30,000
products that it offers and incorporate real time customer service
components into the website,
develop a state-of-the-art Internet marketing campaign,
prepare and distribute a CD-ROM covering product offerings,
prepare and distribute printed catalogues, advertising and promotional
material,
visit or otherwise contact directly targeted customers and vendors,
Develop an effective telemarketing effort,
Develop a network of traditional independent sales representatives to
distribute printed materials and increase its name recognition, and
attend and present at trade shows.
The Company devoted a significant portion of our resources to these
infrastructure efforts during the period from the completion of its public
offering through September 30, 2000. By June 30, 2000 it had completed a
catalogue and CD-ROM covering 15,000 industrial safety products and
had the initial database included on its website. During the period subsequent
to June 30, 2000 it continued its infrastructure efforts, including:
Establishing a real time customer service component to our website,
Started the initial Internet marketing campaign.
Started developing the database for printed catalogues for laboratory
supply, cleanroom supply and various other newly-added products,
Started developing a database for the newly-added products to be added to
the website through the first quarter of calendar year 2001, and
Established a program to outsource a portion of the telemarketing efforts
so as to increase such efforts without adding additional employees.
During this period, the Company added more than 15,000 products to its product
offering. It will take until late in the first quarter or sometime during the
second quarter of calendar 2001 before the database is updated for these
products and catalogues are printed to include them. From a practical
perspective, the Company's sales efforts are seriously limited until those
tasks are completed because many of the new product groups are the ones being
requested by potential customers.
The Company will also move its website away from Apex Interactive to another
hosting source in order to be able to:
Have access to a proprietary database that can be used for the website,
catalogues and CD- ROMs, and
Be able to make timely changes and additions to the database without
incurring significant incremental costs.
The website changes are necessary in view of:
The new initiative into personal care and nutritional products will expand
the need for a flexible database,
The rate at which products are being added to the core product lines
require a cost effective way to make changes to the database, and
The ongoing importance of catalogues and CD-ROMs to the core business makes
it important to be able to use a single database for all purposes.
Supply Programs - In December 1999, the Company entered into a supply
agreement with a traditional wholesaler of industrial safety products. The
agreement provides the Company with the ability to sell more than 15,000
different products. Since then the Company has continually added new
products and product groups. In all cases, the Company has arranged for
vendors to drop ship products directly to customers.
During the three months ended September 30, 2000, the Company also announced
two other initiatives:
Consulting Program -month period ended September 30, 2000, the Company entered
into four agreements for consulting services.
Personal Care and Nutrition -free telephone number. The Company has identified
several unique products, developed an attractive distributor compensation plan
and expects to enter into agreements with contract manufacturers and a
fulfillment center shortly. Current plans call for a website and other
necessary software to be completed by February 15, 2001 with initial sales to
commence shortly thereafter.
The operating results for the period ended September 30, 2000 do not reflect
any significant contribution from these infrastructure and operational
initiatives, and the operating results for the two quarters following
September 30, 2000 are not likely to benefit significantly from these efforts.
The costs associated with those undertakings, combined with the
amortization requirements for acquired intangible costs, make it
unlikely that the quarters ended December 31, 2000 and March 31, 2001 will
be profitable.
Operations
.
The operations during the periods ended September 30, 2000 and 1999
are not comparable. All activities in the 1999 period involved delivering
products to former Laminaire customers relating to orders that were generally
very delinquent because of Laminaire's inability to get products from its
vendors. After the delivery of these products, the Company was unable to
retain most of the customers involved because of their dissatisfaction with
Laminaire. The Company had no full time employees during the 1999 period and
used the cash proceeds from sales to reduce its obligations to Laminaire.
Operating results for the period ended September 30, 2000 are as follows:
<TABLE>
<S> <C> <C>
Revenues $249,420
</TABLE>
<TABLE>
<S> <C> <C>
Cost of revenues 179,247
</TABLE>
<TABLE>
<S> <C> <C>
Gross profits 70,173
</TABLE>
<TABLE>
<S> <C> <C>
Selling and other 66,893
</TABLE>
<TABLE>
<S> <C> <C>
Profit before items set forth below3,280
</TABLE>
<TABLE>
<S> <C> <C>
Amortization of intangibles (27,616)
</TABLE>
<TABLE>
<S> <C> <C>
Other 64,593
</TABLE>
<TABLE>
<S> <C> <C>
Pretax income $40,257
</TABLE>
<TABLE>
<S> <C> <C>
</TABLE>
As indicated above, the Company devoted a substantial portion of its resources
during the period ended September 30, 2000 on developing infrastructure and
marketing initiatives. All of the sales in 1999 involved items associated with
the acquired customer lists. Many of these items related to customers who were
very dissatisfied with Laminaire and who, accordingly, had placed new
blanket orders with other vendors. The Company was unable to retain many of
these customers
The Company realized a higher gross margin on sales than was anticipated
(approximately 25%) because of the initial impact of providing consulting
services.
Amortization consists entirely of expenses relating to the
acquired intangibles.
Other- net consists principally of interest income.
Liquidity and Capital Resources
The Company believes that the net proceeds of its initial public offering
are sufficient to satisfy its working capital requirements for at least
12 months because most of its expenditures relate to marketing and
similar initiatives, and it has discretion over the timing and amount of
these expenditures. In addition, its emphasis on outsourcing means that
its level of fixed costs is relatively low, less than $100,000 per month, and
it has no material obligations or requirements for capital expenditures. At
September 30, 2000, it had cash and certificates of deposit of approximately
$4,866,000.
The Company has no commitments for debt financing. It would seek
sources of financing if it had the opportunity of completing an acquisition.
No specific acquisition opportunity has been identified at this time.
Seasonality
The demand for the Company's products is seasonal. Its customers have a
reduced demand for products in the summer because many of its customers'
employees take vacation, plants are often closed during a portion of the
summer months, and there is a general reduction of business activity
in those months.
New Accounting Pronouncements
No new pronouncement issued by the Financial Accounting Standards Board,
the American Institute of Certified Public Accountants, the Emerging Issues
Task Force orthe Securities and Exchange Commission is expected to have a
material impact on the Company's financial position or reported results
of operations.
PART II OTHER INFORMATION
Item 1 Legal Proceedings
eSAFETYWORLD is a defendant in an action brought by a creditor of Laminaire
asserting, among other things, that eSAFETYWORLD is a successor to Laminaire
and seekingrepayment of $200,000 allegedly due to him by Laminaire. Based on
discussion with counsel, eSAFETYWORLD believes that this case is substantially
without merit and will not result in a material adverse impact on our
financial condition.
.
Item 2 Changes in Securities
See Condensed Financial Statements
Item 3 Defaults on Senior Securities
None
Item 4 Submission of Matters to a Vote of Shareholders
None
Item 5 Other Information
None
Item 6 Exhibits and Reports on Form 8-K
There were no Reports on Form 8-K. The following Exhibits are being filed:
27 Financial Data Schedule
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
eSAFETYWORLD, Inc.
(Registrant)
_/s/_Edward A, Heil
Edward A. Heil
President
_/s/ R. Bret Jenkins
R. Bret Jenkins
Chief Financial Officer
Date: November 14, 2000
